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Wal-Mart Revises Approach To Doing Business In China

February 21, 2014: 12:00 AM EST
Wal-Mart is changing its business strategy in China by closing some of its big-box stores and focusing on private-label products and imported goods. China is an important component of Wal-Mart’s international expansion goals, but the world’s largest retailer lags behind market leader Sun Art Retail Group Ltd. and state-owned China Resources Enterprise Ltd. The retailer forecast full-year profit that is lower than what analysts had expected for fiscal 2015. Factors that drove down the company’s revenue included weaker international sales, which fell 0.4 percent to $37.67 billion; the November–January operating income, which dropped 45.8 percent due to store closures in Brazil and China, and a charge related to the company’s termination of business deals in India. Walmart’s failure to understand Chinese consumers, who prefer foreign brands for reliability and quality, and its emphasis on “everyday low prices” concept hampered its ability to grow its business in the country, market analysts said.
Nandita Bose and Adam Rose, "Wal-Mart's China syndrome a symptom of international woes", Reuters, February 21, 2014, © Thomson Reuters
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